In this article, the perforation mechanism(s) of polyethylene was investigated through experiments. Several polyethylene (PE) film samples were fabricated by compression molding technique. In order to examine the perforation mechanism of PE, perforation tests were conducted according to ASTM F 1306 Standard procedure. The damage and plastic zone areas around the perforated area in PE test samples under cross polarized light condition were studied using the optical microscope. The plastic zone area was measured using an image analysis technique. For further clarification of the perforation mechanism of medium density PE (MDPE) films, the micrographs obtained form scanning electron microscope were examined. SEM observation of the test specimens showed shear bands formed in the plastic zone around the perforated area. The shear bands were observed to be on 45° angle with respect to the direction of applied force.